De­cline in de­mand to limit steel pro­duc­tion

China Daily (Hong Kong) - - BUSINESS - By YANG ZIMAN yangz­i­man@chi­

Iron and steel out­put in China in 2017 is ex­pected to fall due to the shrink­ing de­mand of steel con­sump­tion in­dus­tries and con­tin­u­ing ef­forts to cut over­ca­pac­ity, ac­cord­ing to a re­port.

De­mand is es­ti­mated at 660 mil­lion met­ric tons, down 1.5 per­cent from the 2016 level (which is es­ti­mated at 667 mil­lion tons), said the re­port, re­leased on Mon­day by the China Me­tal­lur­gi­cal In­dus­try Plan­ning and Re­search In­sti­tute.

Out­put of crude steel is es­ti­mated at 788 mil­lion tons, down 2.2 per­cent from 2016 (which is es­ti­mated at 806 mil­lion tons).

Most steel con­sumers will see fall­ing de­mand, such as real es­tate con­struc­tion (354 mil­lion tons, down 1.7 per­cent year-on-year) and ship­build­ing (11.5 mil­lion tons, down 4.2 per­cent).

Two in­dus­tries — au­to­mo­bile (56 mil­lion tons, up 3.7 per­cent year-on-year) and rail­way in­fra­struc­ture (5 mil­lion tons, up 4.2 per­cent year-onyear) — will see ris­ing de­mand.

Li Xinchuang, pres­i­dent of the in­sti­tute, said that China will con­tinue to cut out­dated ca­pac­ity and in­crease in­put in in­tel­li­gent and green man­u­fac­tur­ing next year.

“China has the most ad­vanced steel man­u­fac­tur­ing in­fra­struc­ture in the world. Yet the small and un­reg­u­lated steel smelters, which are pro­duc­ing sub­stan­dard steel and en­gag­ing in high-pol­lut­ing pro­duc­tion, need to be elim­i­nated,” he said.

Sta­tis­tics show that the crude steel out­put of t he ma­jor 70 in­ter­me­di­ate fre­quency fur­nace fac­to­ries in 2015 was 110 mil­lion tons to 120 mil­lion tons, ac­cord­ing to a re­port by csteel­, a web­site fo­cus­ing on the steel in­dus­try.

The goal of shed­ding over­ca­pac­ity in 2016 is 45 mil­lion tons, which had been achieved at the end of Oc­to­ber.

“We still have 55 mil­lion tons to 105 mil­lion tons ca­pac­ity to be cut in the next four years, or 13.75 mil­lion tons to 26.25 mil­lion tons per year. It’s go­ing to be a long and bumpy jour­ney,” said Wang Guo­qing, di­rec­tor of the Lange Steel In­for­ma­tion Cen­ter.

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